Victorian motorists cop car rego hike

Already "over-taxed" Victorian motorists have been slugged with another car registration rise.

Each car owner in Victoria will pay $25 extra on their registration from July 1 and stamp duty on car sales will also rise as part of a state budget hit to the hip pocket.

Treasurer Michael O'Brien promised the money would be spent on roads, and the RACV said it would make sure the promise was kept.

Mr O'Brien said the $136.8 million raised from the two tax hikes in 2014/15 would be used to help fund road and transport projects.

"We appreciate that any increase in car rego is not likely to be welcomed but we do note that we will be delivering major transport infrastructure in this budget that will be of direct benefit to Victorians," Mr O'Brien said on Thursday.

RACV public policy general manager Brian Negus said drivers deserved to know exactly where the money was going.

"Motorists are already over-taxed, with a combination of state and federal taxes and also fuel excise," Mr Negus told AAP.

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"The government needs to be very transparent about where the money is spent."

Car registration fees will go up by $32 - the $25 budget measure plus CPI - to $270 a year from July 1.

Stamp duty on a new $20,000 car will rise from $600 to $640 and from $400 to $420 on a used $10,000 vehicle.

Mr O'Brien said the hikes were modest.

"In the scheme of things these are relatively modest changes but it is important that we make sure that this budget is economically responsible and that we can properly fund the new infrastructure that we will be announcing in the budget," Mr O'Brien said.

Mr O'Brien said the revenue measures were helping cover a $286 million GST shortfall after Victoria's share of GST revenue was cut from 90 cents in the dollar to 88 cents.

Opposition Leader Daniel Andrews said the registration hike would hit people who couldn't afford it.